The recommended way of partitioning is GParted. If you like video guides, SUroot put one together: Using Gparted tutorial - YouTube
If you want a step-by-step, look at this bit of the root memory faq
To play safe, what I'd suggest is:
* take a nandroid backup first
* then back up your entire SD card to a computer (including any folders whose names start with ".", which are "hidden" folders. ".android_secure" in particular must be backed up).
* Follow partitioning guides above.
* Restore SD card contents (assume partitioning will wipe the card, which is why you had to back up first).
You should not need to wipe the phone. I don't know Simple2Ext, but if you add the DarkTremor script (a version of which was linked early in the CM7 thread at XDA last time I looked) you then type a command to start it up an it will move the apps and reboot. The procedure would be to open a terminal emulator and type:
after which it reboots. Repeat procedure but instead of "a2sd reinstall" type "a2sd cachesd" and it will move the dalvik cache.
I expect that S2E allows you to move stuff without a wipe as well.